Obama (almost) cost us our new house

[Mamushka]

Well it was a exciting week. We closed on our new house, a short sale in Lithia (near Tampa). It almost did not happen thanks to our current presidential administration.

Here is what we were told about the sellers:
Had a first and second mortgage on the house.
Had stopped paying their mortgage a while back.
They filed for bankruptcy.
The bank was suing them and that is why they were forced to put the house up for (short) sale.
The second mortgage was used to put a very nice pool in the back yard.

So the day of the closing the owners got a Fed-Ex overnight package. Apparently they filed for some "Mortgage forgives" program with the government a while back and it came in. Well it turns out that the government had agreed to "forgive" their second mortgage, in entirety. All $70K of it. All they had to do was stay in the house and it was theirs. Well of course they contacted their attorneys to see what they could do but apparently the first mortgage company was done with them and they could not keep the house. I have attached a photo of the pool that the American tax-payers almost bought.

[Baiter]

Looks like you're doing just fine under a Democratic President.   

I've gone back and forth over the mortgage forgiveness issue.  For the most part I'm not for it... I mean people knew how much they made, and they knew how much a house cost.  If they bought over their head it's their fault for not being good at math.  If they bought at the wrong time, while they didn't know they bought at the wrong time, they rolled the dice on the economy, and they should suffer or profit from the consequences.

Part of what drove the housing market up was speculation... I don't have any remorse for people trying to profit on a housing bubble and losing.  At one point it was easy to put down a small down payment in a new build and by the time the house was built to profit $100k for nothing.   Many of those same people rode the market right back down, so it's purely an investment loss.

For those who bought for a primary residence, if they were sold a mortgage that they really couldn't afford it was mostly their fault, but partially the banking/mortgage system too.  At some point it is fair to have the mortgage industry take the hit for selling unqualified mortgages, along with the buyer, so if I were writing a mortgage forgiveness program it would be directed toward those situations.  A second mortgage for a $70k pool?  I'd just flat out deny it... but that's not super easy to prove.

But in the end the choice is this: allow people to walk away from a house they were $50k or $100k under-water, or allow the banks to renegotiate the price, because the bank loses that $50-100k either way.  It is much cheaper for them to renegotiate a mortgage with the owner than to roll the house into the whole foreclosure/short-sell process.

So in the end I think renegotiating in many cases rather than foreclosure is better for everyone involved... better for the bank, better for the neighborhood, better for the owner, and better for the housing market as a whole to stop the bleeding and keep confidence levels up.

[Mamushka]

Looks like you're doing just fine under a Democratic President.   

Sounds like a little bit of class envy here, where could you have possibly picked that up from

The reality is that I'm far from rich, I'm just careful with my money (and have been for decades). I also think most here would be shocked at how low my mortgage is on the new place. Play around with a mortgage calculator at 3.625% and see what you could afford.

So in the end I think renegotiating in many cases rather than foreclosure is better for everyone involved... better for the bank, better for the neighborhood, better for the owner, and better for the housing market as a whole to stop the bleeding and keep confidence levels up.

So ultimately you feel that it would just be better for everybody to have the taxpayers buy this guys pool even when we are $16T in debt. That is just going to be something we will never see eye-to-eye on.

Edit: I read your post again and see that you would not do the $70K for this so disregard my last line above. It still does not change the fact that our government is actively doing crap like this.

[Baiter]

Honestly I think at this point in the economy we're at the very tail end of the mortgage crises so whomever is left having trouble paying their mortgage are either too lazy to have taken care of it by now or simply don't quality for the renegotiated mortgage and need to suck it up or sell their house.  The deal wasn't extended to everyone, I know quite a few people who wish they qualified to get some debt relief but they're generally holding tight and paying their bill.

I do understand people are still under-water if purchased in 2007, and hey if I was $100k under-water I'd look at every option I had to clear myself of that $100k problem.  The system went bad, and it is unfair to put the entire burden on the consumer who is under-water... it's all too easy to talk someone into buying more than they need... it's what consumer protection laws are supposed to be for, and proper regulations and policies were not in place.  It's what happens when banks are allowed to run amuck... the power they hold is far greater than that of any government.

[Mamushka]

Honestly I think at this point in the economy we're at the very tail end of the mortgage crises so whomever is left having trouble paying their mortgage are either too lazy to have taken care of it by now or simply don't quality for the renegotiated mortgage and need to suck it up or sell their house.  The deal wasn't extended to everyone, I know quite a few people who wish they qualified to get some debt relief but they're generally holding tight and paying their bill.

I do understand people are still under-water if purchased in 2007, and hey if I was $100k under-water I'd look at every option I had to clear myself of that $100k problem.  The system went bad, and it is unfair to put the entire burden on the consumer who is under-water... it's all too easy to talk someone into buying more than they need... it's what consumer protection laws are supposed to be for, and proper regulations and policies were not in place.  It's what happens when banks are allowed to run amuck... the power they hold is far greater than that of any government.

Of course you would look for a way out, primarily because people in your party don't believe in personal responsibility. You sign a contract then you don't like the terms latter? Run to the government to try and get you out of it.

I bought our house in 2006 right before the crash. I wasn't looking to flip it, just need a place for the family. Going to be putting it on the market soon and will be losing my ass on it (sort of). I have put hundreds of hours and a ungodly amount of money remolding this thing. I took a house that was built in 72 that was never update (fuzzy wallpaper and lemon yellow counter-tops) and made it look like a house that was built in the 2000's. I personally changed out all the window, replaced and finished about 25% of the drywall, moved walls, upgraded the plumbing, upgraded the electrical, etc. In fact it is still not done yet, I will be driving here most days after work for the next month or two until it is finished so I can put it on the market. It should sell for about what we originally paid for it but I will lose all of my sweat equity and remodeling cost. The bottom line is that I signed for the mortgage and I am responsible for paying it off.

[HammysHangout ( Hammy )]

mortgage forgiveness?? hmm.. my folks can barely live on there fixed income now with the increased electric costs..

[kbvette]

                         Mamushka is definitely prospering under Obama.....I'm happy for you, I have a sense that your a hard worker and responsible. You've posted that you recently bought your 1ST brand new vehicle, purchased an investment property, oh
 and somewhere you posted about charging a couple grand a month on credit cards and of course....you pay them off monthly.
         Your livin large ....have fun ,enjoy your new home. I too purchased a short sale as an investment property.....better buy
    now the RE market is moving up.

[Todd]

                         Mamushka is definitely prospering under Obama.....I'm happy for you, I have a sense that your a hard worker and responsible. You've posted that you recently bought your 1ST brand new vehicle, purchased an investment property, oh
 and somewhere you posted about charging a couple grand a month on credit cards and of course....you pay them off monthly.
         Your livin large ....have fun ,enjoy your new home. I too purchased a short sale as an investment property.....better buy
    now the RE market is moving up.

But is he better off than he was before? A lot of people seem like they are living large at 50% of their wealth and income.

Good job getting the house Mamushka.

[funky49]

Congrats on the new digs!

[kbvette]

But is he better off than he was before? A lot of people seem like they are living large at 50% of their wealth and income.

Good job getting the house Mamushka.

                                Kinda hard for me to picture Mamushka sitting in that wonderful pool and SULKING  LOL

[SpineyNorman]

Speaking as someone that owes $96,000 on a house that appraised this year at $38,000 you can all bite my ass. 

[Todd]

                                Kinda hard for me to picture Mamushka sitting in that wonderful pool and SULKING  LOL

The point was obviously ignored or missed. No doubt it is a nice pool though.

[Mamushka]

But is he better off than he was before? A lot of people seem like they are living large at 50% of their wealth and income.

Good job getting the house Mamushka.

Thanks, we decided to move because the boy's school is going down the tubes. It was A rated when he was in kindergarten, B rated school when he was in first grade and now a C school for second grade. It was actually cheaper to move than to place him in private school (and I have a 3 year old little girl coming up behind him).

Am I better off than before? Hard to tell. Yes we bought 2 rental houses last year (about $40K each) but that was with the wife's 401K. She hasn't worked since my son was born (2005) and with all the ups and downs it basically gained nothing in 7 years. We finally said screw this and decided to take control of our own money. Was it a smart thing to do? It still looks like it, but I guess we will really know in 10 years or so.

[Mamushka]

Speaking as someone that owes $96,000 on a house that appraised this year at $38,000 you can all bite my ass. 

Yea, kind of the point of my post. The current administration shoveling tons of money at the upper-middle class should piss off all of us.

[Baiter]

Of course you would look for a way out, primarily because people in your party don't believe in personal responsibility. You sign a contract then you don't like the terms latter? Run to the government to try and get you out of it.

Making unfounded generalizations continues to be your hallmark.